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Is Risk Management Managing You?

During my corporate P&L general management days, we had a saying about our head of risk and compliance: “He’s predicted all 12 of the last zero disasters.”

Indeed he was always finding reasons we should NOT do something. Growth was “suspicious” and innovation was “worrisome” and a single audit issue foretold there would be “much more to come.” Grim, huh? One wondered how he drove home at night without going mad or bursting into flames.

In this case, we, the leaders, were allowing risk to manage our business outcomes, versus balancing risk with innovation and growth.

As CEO, Board Member, or Senior Executive, it’s incumbent on you to find a better balance -- the happy medium between prudence and paranoia, and to do so without reacting to past events or predicting serial future doom.

Here’s How to Rebalance Risk Management

A simple model for doing this is to analyze the major risk factors in your enterprise(s), address the risks with excellent controls, and then find the keys that unlock those risks from growth and innovation. Sounds easy, right? Well it takes quite a bit of work, but is highly worth it.

Short of doing that, paranoia and the associated dampening of business activities – posing as “risk management” – won’t work unless you plan to run a mausoleum.

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Is Risk Management Managing You?

During my corporate P&L general management days, we had a saying about our head of risk and compliance: “He’s predicted all 12 of the last zero disasters.”

Indeed he was always finding reasons we should NOT do something. Growth was “suspicious” and innovation was “worrisome” and a single audit issue foretold there would be “much more to come.” Grim, huh? One wondered how he drove home at night without going mad or bursting into flames.

In this case, we, the leaders, were allowing risk to manage our business outcomes, versus balancing risk with innovation and growth.

As CEO, Board Member, or Senior Executive, it’s incumbent on you to find a better balance -- the happy medium between prudence and paranoia, and to do so without reacting to past events or predicting serial future doom.

Here’s How to Rebalance Risk Management

A simple model for doing this is to analyze the major risk factors in your enterprise(s), address the risks with excellent controls, and then find the keys that unlock those risks from growth and innovation. Sounds easy, right? Well it takes quite a bit of work, but is highly worth it.

Short of doing that, paranoia and the associated dampening of business activities – posing as “risk management” – won’t work unless you plan to run a mausoleum.